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Leveraged

Why You Shouldn't Hold Leveraged Tokens Long Term🤔❌❗🚫💥Leveraged tokens, is an invention of the FTX exchange , with leveraged exposure without taking care of the margin, requirements, management, and liquidation risk. In other words, Leveraged tokens are the easiest way to do leverage trading but are still not safe from the risks of severe losses, although the risk of liquidation is no longer It does not exist, but it can reduce asset to zero, especially in the long term. 🔰Leveraged tokens are often the most misunderstood products in the crypto industry. These tokens are essentially funds that use derivatives and leverage to amplify the returns of an underlying asset. Typically, a leveraged token offers a multiplier of an index or a specific asset's daily return. For instance, a 3x Long BTC will generate triple the daily returns of Bitcoin. leveraged tokens are built to multiply the underlying asset's daily return-the main component to remember here is DAILY. The leverage factor of a token will be reset every day. As a result, the performance of a token and its underlying asset can differ over the long term. ✳️While the comparison of daily and total returns can sound trivial, the math behind them differs in contrast. For example, even a non-leveraged portfolio that loses 10% on one day would not be able to break even with a simple 10 % increase on the next day. An investment of $100 that loses 10% on one day is worth $90 at the end of the day. But if the price goes up 10 percent on the second day, that's a 10 percent rise from $90, bringing the price at $99. Clearly, the math didn't add up as you would expect. As such, in the event of losses, a portfolio needs a return greater than its loss to break even. The graph in above chart shows the subsequent rate of return needed to break even at varying levels of portfolio losses. -------------------------------------------------------------------------------------------------------------------- 💜 if you're a fan of my analyses follow me and give a big thumbs 👍 OR drop a comment 🗯💭 🙏with Best Regards
FTX:BCHUSDEducation
by PRO_SMART_Trader
Daytrading Leverage Strategy for Bigger Accounts on Forex[R:R 3]Hello everyone, Many of you wonder how it feels to trade bigger accounts, and keeping it short: stop thinking punctual. Whenever you think I'm buying HERE and getting out exactly THERE. Forget it, never again. There's simply not enough volume for your positions - so what you do? You break it up and you start thinking the final average price. You stop thinking on static numbers and you start considering regions for entry and exit. Larger institutions take WEEKS to close their positions, so I think you get my groove here. It's hard to think tops and bottoms when you need to buy and enter all over the place - the art of market making(but that's a whole other story). So when I started struggling with such a problem, all my strategies were basically at their maximum capital capacity. The main symptom was that my entry limit orders were being filled partially all the time. Since I'm a very thrill guy when it comes down to the strategies I like to have every single step very well written before I start opening positions. Not only entry and exit points but also position sizing are crucial for me. The solution was to break my position in smaller positions that I called ACU's. Let's say we have a 10% ACU, that means that each ACU that I buy that is equivalent of 1/10 of the total position size I initially wanted. The second step was changing my algorithms to things that triggered more often across a zone and not super price and solid signals that trigger only once. So now I'm buying a little bit here and there, with the goal of having a better final average price. Another secret factor for success here is being quick on or fingers or if you're tech savvy enough getting an execution bot for you. Which means you can further break your ACU's across a buying zone. Let's say your buy-zone goes from 1 to 2, you will spread your ACU close to what I'll explain next. Imagine something around 10% of 10% of your total position size, yes only 1% of total Because you will break your ACU in 10 smaller positions across the 1~2 range, similar to this Buy 10% ACU at 1 Buy 10% ACU at 1.1 Buy 10% ACU at 1.2 ... Buy 10% ACU at 2 I know it sucks and it takes time, but the more you break your position is better and I'll tell you why. BECAUSE IT GUARANTEES YOU THE BEST POSSIBLE ENTRY PRICE. The price hardly ever go all the way down to the bottom of the range and if does your avg price will be 1.5 But let's work with MOST of the times, that the lowest it goes on your buy-zone is around 1.3-1.7 It will always allow you to catch the best avg entry price, I know some of your limit orders won't be filled but this makes the risk a lot smaller for you, so be patient and master your greed. This also allows the usage of leverage since operating like this makes you REALLY hard to get liquidated, the tools and the settings I used on Spectro M2 are Xconf on aggressive mode(arrows above/under candles), Spectro Warnings on Moderate(gray warnings), Adaptative Fibonacci Levels( pivot levels) & Scalper Exhaust Reversal Tool(blue background). Also to make the stop-loss rules clear: If the price just touched #1 Target - Do nothing If the price just touched #2 Target - Move up one level If the price just touched #3 Target - Move up SL to #1 target If the price just touched #4 Target - Move up SL to #2 target if you think there will be a break-out otherwise close your position Let me know if you have any doubts!
Education
by spectertrading
2
LEVERAGE: The Legitimate UsageImagine you have a strategy and you found that the optimal risk you should take is 4%. In other words with this strategy you should put 4% of your capital at risk in every trade to grow your account the fastest. If you enter a trade with 100% of your capital, the SL % is the % you put at risk. NOT the whole position size. So by entering a trade with all of your money and setting a 4% SL you only put 4% of your money at risk at all times ! Now let's examine the following situation keeping our strategy in mind. Imagine a perfectly oscillating market (for demonstration only). We are at the point where the red line ends and we expect the price to go the dashed path with a very high certainty. Our optimal & desired risk is 4%. However in this trade that we want to enter rightnow we can set a stop loss tighter than 4% because we are very certain that it wont be hit. So we can use a 2% stop instead. If you now put 100% of your capital in this trade you only put 2% of our money at risk at all times. However we want to put 4% of our money at risk for the best returns possible taking optimal risk (4%). That's where leverage comes into play as a LEGITIMATE tool and not a gambling tool. You already have 100% of your money in this trade, you can't put in more (without leverage) although your risk management tells you to do so. You want to increase your risk from currently 2% to 4% = double it. This means you have to take a 2x leverage. Now you are 200% invested in the trade and if your stop loss of 2% (in price action) gets hit you will lose 2 x 2% = 4% which is the optimal risk we wanted. More in-depth information about optimal risk for fast growth: en.wikipedia.org www.youtube.com
BITSTAMP:BTCUSDEducation
by MagnusTradingGroup
12